Reportable Condition: Independent Auditor's Report – USAID's Process for Recognizing and Reporting Its Overseas Accounts Receivable Needs Improvement (Repeat Finding)
Summary: USAID's process for recording and reporting receivables still needs
improvement. Although many missions are currently using Phoenix for overall financial
management, these same missions are still reporting only their quarterly accounts
receivable balances to USAID's Washington headquarters separately, and outside of
Phoenix. This occurred because USAID has not strengthened its procedures for
accounting and reporting for accounts receivable at its overseas missions. As a result,
USAID still cannot routinely provide current accounts receivable information for its
overseas missions.
Statement of Federal Financial Accounting Standards No. 1, paragraphs 40-52,
Accounts Receivable requires the recognition (recording) of accounts receivable when a
claim to cash or other assets has been established. The establishment of accounts
receivable cannot occur on a timely basis unless there are adequate procedures in place
for recognizing, recording and reporting them at the end of each accounting period.
A memorandum from the USAID/Chief Financial Officer on the Mission Year-end
Financial Data Certification Process cited that it was "assumed" that migrated missions
(those with access to Phoenix) would report accounts receivable transactions directly.
Missions that have migrated their accounting system to Phoenix are still using the same
data-call process being used by those missions without access to Phoenix. The datacall
process requires missions to separately report their accounts receivable balances
every quarter to allow for the preparation of USAID's quarterly financial statements. As
a result, USAID does not have current detailed information on accounts receivable
balances for its overseas missions despite the integration of an accounting system
overseas that allows for this.
Since Phoenix does not contain current information on mission accounts receivable, the
reports it generates are incomplete. USAID, for example, generates an aged accounts
receivable report from Phoenix that provides details of past due receivables. But
information contained in this report that relate to USAID's overseas missions cannot be
relied on for decision-making as long as overseas missions do not consistently use the
system for accounting for receivables.
In our FY 2004 audit report, the OIG previously considered the lack of a worldwide
integrated financial management system that correctly recognizes and records accounts
receivable, to be a reportable internal control condition; therefore we are not including an
additional recommendation to address this condition. Instead, we will continue to
monitor USAID's progress in implementing the OIG's previously recommended
corrective actions.
This report is intended solely for the information and use of the management of USAID,
OMB and Congress, and is not intended to be and should not be used by anyone other
than those specified parties.
USAID, Office of Inspector General
November 14, 2005
Back to Top ^ | < Previous Page | Next Page >
|
